1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Alborosie
3 years ago
5

(Calculating the cash conversion cycle) Network Solutions just introduced a new, fully automated manufacturing plant that produc

es 2,000 wireless routers per day with materials costs of $50 per router and no other costs. The average number of days a router is held in inventory before being sold is 45 days. In addition, the company generally pays its suppliers in 30 days, while collecting from its customers after 25 days.
a. What is the cash conversion cycle?

b. What would happen to the cash conversion cycle if the company could stretch its payments to suppliers from 30 days to 50 days?

c. How much would working capital financing be reduced if the company stretched its payments to suppliers from 30 days to 50 days?
Business
1 answer:
forsale [732]3 years ago
3 0

Answer and Explanation:

The computation is shown below:

a. As we know that

Cash conversion cycle is

= Days inventory outstanding + days sale outstanding - days payable outstanding

= 45 days + 25 days - 30 days

= 40 days

b. Now if the payment of supplier changed from 30 days to 50 days which is

Cash conversion cycle is

= Days inventory outstanding + days sale outstanding - days payable outstanding

= 45 days + 25 days - 50 days

= 20 days

c. Now the reduction in working capital is

= Difference in days × production × material cost per order

= 20 days × 2,000 × $50

= $2,000,000

We simply applied the above formulas

You might be interested in
Suppose that you go to a bank at which you have no account, give the bank cash, and in return obtain a check drawn against that
igomit [66]

Answer:

Cashier's check.

Explanation:

These checks are said to be quaranteed and issued in the bank by the banking institute. It contains the name of the receiver receipiant which has been inscribed in the check by the banking institute or credit union attached to the receiver also with the amount of money written on it. This amount written on it is known to be the withdrawable amount.

The cashier's check can be sent out in form of a letter, fax or even a mail to the intended persons or organisation making the withdrawal.

Here, monies which are been orders are easily secured by use of a cashier’s checks.

3 0
3 years ago
Identify the risks exist in the conversion cycle of Central Production Limited.
11111nata11111 [884]

Answer:

Authorization of transactions:- Because of unclear subjugation, there is a potential risk of entering a money transfer again and again. To minimize this, all workers should adopt the rules for specific purchases, such as maintaining a set pricing list and guarantee a limited error distance.

Explanation:

The following are the risks which currently exist in the Central Production Limited conversion cycle:-

  • Lack of a "Maker and Checker" concept:- It is important because it executes the role of a sort account executive to check that the instructions and demands presented are correct and are not replicated. It would be extremely effective that someone in a position of power and authority might supervise certain rates and with certain operations.
  • Use of Hard-copies:- The production center supervisor will temporarily suspend the use of such hard copies for each production process. It is not only a resource loss, but risks being lost or duplicated as well. It really would give them a better chance if all online requests could be collected which would be far more effective and could be seen by all stakeholders. It will also lead to better leadership and faster distribution of information.
  • Wastage:- Tests should be in place to determine why additional material is needed above the normal volume, and it should be approved by a senior authority to the superintendent of the production line.
  • Supply Chain Management:- Interactions between a variety of agencies are too many. Use an ERP (Enterprise Resource Planning) device to help in streamlining the entire process flow will serve them well.
5 0
3 years ago
Explain the difference between Motivation and engagement
serious [3.7K]

Answer:

Engagement is a sense of purpose, belonging, and commitment to an organization, whereas motivation is the willpower and drive to act on those feelings.

Internal motivation may lead us to take some action; for many, engagement refers to what we experience during the activity

Explanation:

Internal motivation may lead us to take some action; for many, engagement refers to what we experience during the activity.

3 0
2 years ago
Read 2 more answers
When a competitive equilibrium is achieved in a market
aev [14]
The answer for this is Letter D. 

<span>An expert in economics says that when the net benefits of all economic businesses are maximized it means the distribution of resources is effective and achieved but there must be one condition to be considered, market’s allocation should be competitive or well functioned.</span>


5 0
3 years ago
In the multiple-step income statement, cost of merchandise sold is subtracted from a.selling expenses. b.sales. c.gross profit.
zalisa [80]

Answer:

b.sales

Explanation:

As we know that

Income statement refers to the statement in which the revenues and the expenses incurred should be recorded

While on the other hand the multiple-step income statement refer to the statement in which there are various level like gross profit, total operating expenses etc

Plus we also know that

Gross profit = Sales - cost of goods sold

Therefore the cost of merchandise should be deducted from sales so that we can find out the gross profit

3 0
3 years ago
Other questions:
  • Ten years​ ago, Latesha acquired a one-third interest in Dana​ Associates, a​ partnership, for​ $26,000 cash. This​ year, Latesh
    7·1 answer
  • The parenting style which takes the concerns of all family members into account when making decisions is __________. permissive
    8·1 answer
  • NAME ONE ORGANIZATION THAT CAN HELP A NEW ENTREPRENEUR WITH FUNDING AND SKILL DEVELOPMENT SOUTH AFRICA
    12·1 answer
  • Intentionally making any false or materially inaccurate representation or comparison of two or more policies which induces any p
    14·1 answer
  • Suppose canada has a population of 30 million people, and labore force participation rate of 2/3. furthermoew, suppose the natur
    6·2 answers
  • Albo Corporation and Black Corporation are identical in every way except their capital structures. Albo Corporation, an all-equi
    6·1 answer
  • If a nation has a comparative disadvantage in the production of some commodity: Group of answer choices it cannot gain from inte
    10·1 answer
  • volume_upclosed_captiondescriptionfullscreen According to Mikey, the founder of Holden Outerwear, manufacturing products at five
    10·1 answer
  • The United Kingdom currently has a trade deficit with New Zealand. If the U.K. pound sterling appreciates relative to the New Ze
    15·1 answer
  • Lindsay took out a(n) to purchase her new home. she used in the form of the property to back the loan. lindsay also paid money i
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!